Model Portfolios: A smarter approach to multi-manager implementation
By Robert Swift
Delft Partners manages wholesale unit trusts and 'Direct Managed Accounts' (aka Individually Managed Accounts) where we deploy our systematic investment process to produce value biased portfolios. For larger pools of capital, with multiple managers deployed, we also offer a 'Model Portfolios Service' where we design optimal portfolios, provide stock codes and weightings to our clients on negotiated regular update terms and they implement the trades and manage trade settlement and asset custody.
This MPS has many benefits for the client and investors. They can 'outsource' some of their fund management to a diversifying manager; they can utilise their existing trading and custodial relationships and avoid multiple administrative tasks, and, perhaps most importantly for their total portfolio, it can increase transparency, minimises trade error management and reduces unnecessary, costly trade replication and potentially offsetting trades.
We highlight in an attached article by Northfield Risk Systems the benefits of Centralised Portfolio Management, showing why and how this MPS is increasingly being deployed by large asset managers and plan fiduciaries.
Dan also wrote an update to this original piece that can be found here.